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Nigeria’s House of Representatives has approved President Muhammadu Buhari’s request to issue promissory note and bonds worth N396 billion as payment of refunds to 19 states.
The approval was granted to mark the third year anniversary of the 8th session of the House of Representatives.
Adeyinka Ajayi, chairman, House Committee on Aids, Loans and Debt Management who acknowledged the concerns raised by the monetary policy authorities and effort to control liquidity in the economy in order to put inflation under control, however expressed optimism that the fund would go a long way to reflate the economy.
Based on geopolitical zone, South West gets the highest allocation of N143,877,697,406.31, followed by South-South region with N99,212,953,260.08; North West gets N48,490,679,508.11; South East gets N40,867,282,521.34 while North Central gets N26,746,086,891.40 for various federal road projects constructed on behalf of Federal Government.
President Buhari had in a letter dated 8th March, 2018 requested for the approval to commence a promissory note and bonds issuance programme to clear long-standing obligations inherited by the present administration.
According to the document obtained by BusinessDay, the obligations include: unpaid obligations to pensioners, salaries and promotional arrears to civil servants; obligation to petroleum marketers; contractors and supplier debts; unpaid power bills and obligations from tariff reversal in 2014; Export Expansion Grant (EEG) scheme debts; Judgement debts and refund to State Governments for projects undertaken on behalf of the Federal Government.”
Buhari’s request was in compliance with the provisions of the 1999 Constitution (as amended), Debt Management Office (establishment) Act, 2003 and Fiscal Responsibility Act, 2007.
Breakdown of the funds to be refunded on state basis shows that: Lagos state gets N114.606 billion; Akwa Ibom state gets N78.782 billion; Zamfara state gets N39.919 billion while Anambra state gets N37.970 billion.
Similarly, Ebonyi state is to get N15.447 billion; Enugu state gets N13.564 billion; Osun state gets N13.291 billion; Plateau state gets N12.152 billion; Ekiti state gets N11.684 billion while Kwara state gets N11.254 billion.
The House also approved the sums of N10.720 billion for Jigawa state; N10.431 billion for Edo state; N6.928 billion for Gombe state; N4.425 billion for Kano state; N4.332 billion for Ondo state; N4.246 billion for Adamawa state; N3.026 billion for Benue state; N2.897 billion for Imo state while N333.860 billion is for Niger state, respectively.
According to Yinka Ajayi, chairman, House Committee on Aids, Loans and Debt Management, a technical sub-committee that liaised with appropriate Ministries, Departments and Agencies (MDAs) responsible for various areas intended to benefit from the proceeds of the promissory notes and bond issuance programmes.
“One of such technical sub-committees was one set up to verify claims for refund to State Governments for projects executed on behalf of Federal Government.
“The sub-committee was to liaise with the Federal Ministry of Finance and the Federal Ministry of Power, Works and Housing to verify the authenticity of the claims as regards the execution of the federal highway projects in the various states contained in the request by Mr. President.
“The technical sub-committee resolved to visits locations of the projects. Due to the enormity of the task before the technical sub-committee set up to verify the claims in respect of the 25 states, it adopted a phased approach to the verification exercise,” Ajayi (APC-Osun) informed the House at the Committee of the Whole.
According to him, the Committee on Aids, Loans and Debt Management who acknowledged the concerns raised by the monetary policy authorities and effort to control liquidity in the economy in order to put inflation under control, however underscored the need to reflate the economy.
“The committee also notes the long term debt management strategy of the Federal Government to approach the domestic capital market with caution so as to reduce cost of debt service an also not to crowd out the private sector,” Ajayi urged.
KEHINDE AKINTOLA, Abuja
